12 Cities:Upstart Cities – H1 2016

12 Cities

16 March 2016, by Yolande Barnes

Here Come The Upstarts

It’s been 10 years since we started collecting residential market data for world-class cities, and seven years for commercial real estate data. The unique method we use in order to make diverse cities comparable has proved so effective that we have since applied it to a total of 20 cities, which are now part of our live/work accommodation cost ranking.

We are always faced with a challenge when narrowing the list of cities down to just 12, and this issue is no exception. We decided to revisit our first report of 2011, which showed significant differences in the performance of real estate in the emerging markets (which we termed the ‘new world’) and the established markets of the ‘old world’.

In 2011 we reported that the new world cities of the BRIC countries including Shanghai, Mumbai and Moscow, along with Hong Kong and Singapore had significantly outperformed London, New York, Paris, Tokyo and Sydney since 2005. Repeating the analysis for the years to 2015, we now find that it has been the turn of the old world cities to outperform. Economic growth and wealth creation having slowed in the new world, it is economic revival that has driven real estate recovery in Europe and, most especially, in the US.

The big story in this issue is not just the shift of real estate growth back from East to West, but also the emergence of new cities into the real estate firmament. It is notable that real estate recovery in the old world has not been universal, but rather concentrated in those cities that are most favoured by occupants and investors in the digital and creative economies. This also means that some relatively small cities are moving with great velocity into the realm of world-class cities and competing with the giants in the new digital age.

We have added Berlin and Dublin to our list of cities for this reason and dubbed them, along with San Francisco, ‘upstart cities’ for reasons of size and their sheer economic precociousness on the global stage.

We hope this document will point you in the right direction in the continually changing global real estate market.